South University is on 12 months probation with the Southern Association of Colleges and Schools accrediting agency (SACS) and sale of its parent company, Education Management Corporation (EDMC), is pending.
The issues began after EDMC purchased South University in 2003 and amassed 107 for-profit art, business, health, law and online colleges across the nation. Within eight years EDMC became embroiled in a predatory recruitment and loan scandal and profits plummeted.
“South University was placed on probation due to financial concerns surrounding its parent company, Education Management Corporation (EDMC),” the university said in prepared statement. “South University is financially stable, and continues to annually increase the amount it spends on educational services and campus expansions and improvements.”
Acting on media reports about EDMC’s financial problems, SACS officials investigated South University and placed the Savannah-based for-profit institution on warning status in 2014 and 2015. After a review in December 2016, SACS investigators said the institution failed to demonstrate financial stability. South University was placed on 12 months probation, but accreditation was continued. Probation is the most serious public sanction imposed by SACS before revoking accreditation. Degrees from unaccredited institutions have little value.
But South University officials say they are working to address SACS’ concerns. Since 2017, officials say $13.2 million has been invested in facilities, technology and equipment at all South University campuses, the online program has been updated and new programmatic accreditation was granted.